Is the renminbi the next global currency?

Geng Xiao, director of the Brookings-Tsinghua Center for Public Policy, discusses how divergent growth rates of the Chinese and US economies will erode the hegemony of dollar—but not right away.

February 2010

The US dollar’s run as the world’s stable currency has stumbled with the recent financial crisis. Waiting in the wings is the renminbi. But according to economist Geng Xiao, it’s still in China’s—and the world’s—best interest not to dump the dollar just yet. In this video interview, Geng Xiao, director of the Brookings-Tsinghua Center for Public Policy, explains why China needs time to push through difficult economic reforms at home before it can allow its currency to float freely against the dollar. McKinsey Publishing’s Clay Chandler conducted the interview with Xiao in Hong Kong.

December 2009—For the first time this year, a majority of executives expect consumer demand for their goods to rise in the near term. Respondents offer relatively positive views of the economy and say they can now make longer-term strategic plans. However, many expect investment decisions over the next two years to be affected by heightened exchange rate volatility.more

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